The May Teranet-National Bank
Composite House Price Index has been released and it shows the home price
index in Canada up in May for the first time in nine months though it was the
smallest May increase in 21 years. Given
that there is usually a bump up in real estate markets in the spring, given the
small increase by historic standards, it means that real estate markets are
still slow. Indeed, once the index is
seasonally adjusted it would appear that the index is actually down 0.4 percent
in May rather than up 0.5 percent.
Some of the largest
markets in the country – like Vancouver – are still in decline but Ottawa and
Hamilton have been seeing larger increases.
According to the Teranet Index: “Unadjusted
indexes were up on the month for nine of the 11 metropolitan markets of the
composite index, the exceptions being Vancouver (−0.2%) and Edmonton (−0.3%).
Calgary was up 0.3%, Winnipeg 0.5%, Toronto 0.7% and Victoria 0.7%, but indexes
for these four markets were down when seasonally adjusted. Index changes for
Montreal (+0.5%), Quebec City (+0.8%), Halifax (+0.9%), Ottawa-Gatineau (+1.9%)
and Hamilton (+2.2%) would have remained positive after seasonal adjustment.”
Of interest to those
of us here in the North are the results for Thunder Bay and Sudbury which are
part of a set of figures not included in the main composite index. Quoting Teranet: “Down from nine months ago were the two in B.C. – Abbotsford-Mission
(−5.2%) and Kelowna (−3.6%). Up were the five in Ontario – Thunder Bay (1.6%),
Sudbury (2.9%), London (4.0%), Kingston (4.2%) and Windsor (6.8%).” These last five cities are all places that
have economically had a pretty tough time over the last few years and rising
house prices are some evidence of recovery.
So, it would appear
that the continuation of lower interest rates in Canada, plus what has been
strong employment growth is on the whole managing to prop up real estate
markets especially in some smaller Ontario centers a bit more removed from the
GTA. Windsor certainly comes to
mind. Prices in these markets are still more
affordable at least by current Canadian standards though given the overall
sluggishness one really cannot expect a resurgence of the boom of the last few
years. Aside from Hamilton, other
centers closer to the GTA are not doing as well – for example Barrie,
Peterborough, Guelph and Oshawa.
